With interest rates still at near-zero levels and traditional income investments yielding next to nothing, investors’ fascination in master limited partnerships (MLPs) remains at an all-time high. And what’s not to like? The corporate tax structure allows for sponsoring firms and investors to receive some pretty hefty tax-deferred distributions. And as a pass-through entity, these dividend-like payouts typically result in high yields ranging anywhere from 4% to 7%. Not too shabby.
In short: MLPs historically have been able to provide yield growth in excess of rising rates. Of course, not every MLP is worthy of your investment dollar. Which is why today, we’ll look at six master limited partnerships that still have the goods: Enterprise Products Partners L.P. (EPD), Holly Energy Partners, L.P. (HEP), Plains All American Pipeline, L.P. (PAA), SunCoke Energy Partners LP (SXCP), TC Pipelines, LP (TCP) and Williams Partners L.P. (WPZ).